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tv   The Intelligence Report With Trish Regan  FOX Business  September 22, 2015 2:00pm-3:01pm EDT

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we a lot further points to go down too. you put it that way. the pressure on francis to keep this market as other pontiffs have to the plus side. if he doesn't, god save us all. trish regan. take it. trish: thanks, neil. everyone, we're 120 minutes away from the close of what is a pretty dramatic selloff. i'm trish regan. this is "the intelligence report." stocks sinks as investors worry about the global economy. they keep second-guessing what the federal reserve will ever hike rates. hillary clinton not helping things out here. biotech seeing big downside, dragging nasdaq lower as investors prepare to hear how hillary clinton would augment obamacare. that is coming up. teddy weisberg on floor of nyse and steve holland with me as well. teddy, this is a market we said all along is very dependent on
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the federal reserve. effectively that suggest bar high they kept going. they basically indicated they will keep it going for the foreseeable future. yet you have a market that's nervous, that's selling off. what is really troubling people here? >> think one of the problems, and it is not new news to anybody, that the fed still appears to be trapped between a rock and hard place. i'm not sure they know what to do. one things markets do not like is uncertainty. i think a lot of folks were primed to see the fed bump rates up at the last meeting. i think there was a lot of disappointment when they didn't do it no matter what the reasons. now we have a whole new set of pa rammers it. they're worried about china, they're worried about this and they're worried about that you know what? they can all worry about things until they're in never-never land. trish: the market keeps going down and the fed worries and everybody else worries. the real concern, teddy, you touched on this, have they
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gotten away, mike holland from their dual mandate? they're supposed to be worried about employment and inflation but now they're worried about china. >> contradictory stuff is fills in the line teddy talked about with the worth uncertainty. the fed from seven years, 2007-8 on gave us a free pass to easy markets, easiest bull market of my life and ted's life. we have over last several months conflicting words coming out of different talking fed heads. open market committee as people talk about it, people have uncertainty because of what had brought us to this great point in the market is no longer there. it is worse than that. it is confusing. >> uncertainty and conflicting viewpoints. i would point out feels to me as though, steve cortez, they're talking too damn much. every chance they can get the fomc members talking to the press, saying this, saying that. >> right. trish: getting invest public tied in knots.
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>> sometimes, trish, silence can be golden. we could use a little silence from central bankers. neil cavuto, your colleague, about the papal visit impending. i see more red than if i was looking at college of cardinals. it is really bad scene in the market. trish: for a reason i guess. >> and the reason there is so much red, this is bad red, not that nice vatican red, reason so much ready believe sadly that global markets are starting to lose faith and confidence in central planning and central banks. this is very, very dangerous situation. trish: you're right. >> whether it is beijing, with their centrally-planned economy or d.c. with constant at diction to fomc pump priming. i think we reached end of that rope. that is a very dangerous thing for investors. trish: teddy, they served and relevance at certain time and place, when we think back to the scary days of 08, they were there. they kept the spigot open.
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they had liquidity in the marketplace and they have kept that open and open. to the point where this may be a situation, law, teddy of diminishing returns. >> i think you're immediate previous guest hit the nail on the head i think they have way overstayed their welcome. they're way overthinking the problem. there is too much rhetoric creating too much uncertainty, lack of confidence. all, if you mix it all together it is an ingredient for negative markets because markets -- trish: i just want to jump in. she is talking again on thursday. we're going to hear some more. what is the market going to do when they hear that? >> you know what? i've been doing this a long time, i think your other panelists know this also, you can't talk markets up, you can't talk markets down of the people have to do something. right or wrong, they need to do something. trish: okay. >> this constant rhetoric is really helping nobody including the government. trish: look, i totally agree
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with you. here is my worry, my calling, deflation, the ugly d word. we've got so little wage inflation. wages .2% month over month. no inflation in the economy despite these extraordinarily aggressive measures from the fed. should we be worried about something else going on here? >> deflation is something that we have been talking about since 2007-8 because ben bernanke spent a lot of time worried about 1929 deflation and japan. he did a lot of stuff, qe1, 2, 3, where he could help these things of the at the end of the day our central bank is not doing anything to stave off deflation. diminishing return. price of every commodity this morning is down. trish: yeah. >> it is not doing anything, the fed if anything is causing worse deflation in terms of commodities prices. trish: i -- last word to teddy.
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we want to get to goldman. sad news out of goldman sachs with lloyd blankfein. teddy, overall sense where we're heading? is this beginning of something much bigger? had investor simply said, fed can't do what we thought it could do, we're out? >> at the end of the days the fed is important and it is about corp. earnings. there is a lot of moving parts here, trish. it is not just all about the fed but i think in general this is the time basically get on the sidelines and let stocks go where they want to go. there will be plenty of time to buy them down the road. trish: teddy, so good to see you again. thanks for coming on "the intelligence report" even with that sort of disappointing message. it is what it is, everyone. we're watching goldman sachs because goldman is weighing on the dow. ceo lloyd blankfein revealing today he has cancer. in a memo to employees he writes, quote, my form of lymphoma is highly curable.
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my treatment plan is over the several months in new york. my doctors advise during treatment i will work substantially as normal leading the firm. my colleague, steve cortez is here. steve, talk about the effect on the stock here. investors, they look to lloyd for leadership. goldman saks clearly looks to lloyd for leadership. when a ceo falls ill like this, we saw this in the case of jpmorgan and jamie dimon. he had throat cancer, what happens to the schoolgy of investors buying into that stock -- psychologygy? >> trish, listen, lloyd blankfein has been such a powerful and effective leader not just for goldman sachs, but to all of wall street. he embodies wall street to the rest of the world. it is distressing and serious that he has a serious illness, this is transparent they have to be transparent with employees and investors about his condition. if it worsens they need to say
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so. as long as they do that, i'm confident, goldman sachs has incredibly deep bench. if they to rely on number two, three, four hitters in the lineup i think they will be well able to do that. trish: they do have a deep bench. is goldman in your view, mike holland different than other firms? it is not just about one guy or is it judging by the stock price today? >> you spent some time there? trish: i did spend time there. thank you for mentioning that. i was on emergeing markets debt trading latin american bonds. >> you know how strong the team is. full disclosure, lloyd blankfein is a friend of mine. i dropped another name, steve schwarzman on the streets of new york. he had same reaction, lloyd to steve's point is transparent person. we know everything his doctors have told him. he is probably going to do just fine because that's what he said. having said that just as steve said, and as you just said, the
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deep bench both jpmorgan and goldman sachs causes us to step back and say, it is really awful. we want the best for them. they will have the best. if some day one or the other jamie dimon or lloyd isn't there, will we be okay as shareholders? the answer is of course. trish: yeah. we're happy to hear that -- >> we hope they retire, let them golf i guess. trish: thanks so much, mike and steve. turning to politics, hillary clinton tanking the nasdaq. how do you like that? biotechs leading declines. sector is trading off 3%. this is thanks to the fact that hillary is doubling down on obamacare and hoping to make it even more anti-business than the law already is. moments from now she will lay out a proposal to cap out-of-pocket costs for prescription drugs. she wants to prevent taxpayer-funded companies being able to advertise. this is what she is saying about the plan. listen to this. >> we'll start capping how much you have to pay out-of-pocket for prescription drugs each month.
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we're going to hold drug companies accountable as we work to drive down prices. look, nobody in america should have to choose between paying for the medicine they need and paying their rent. trish: all right. i agree. but is this really the best way to do this here? democratic strategist richard good steen, and health policy expert join us from manhattan institute. first to fox news's ed henry. ed, i wonder is this latest chapter in her fight against capitalism? >> reporter: good to see you, trish. the clinton camp would push back on that notion. they're it saying there are a lot of good things about the president's health care law known as obamacare. hillary clinton will be very aggressive in the campaign pointing that out. also noting if you look at last republican debate you did not hear much of anything about repealing obamacare. republicans seem to pull back from that. she sees political opportunity here.
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she see as chance to help consumers. you mentioned, you know the prescription drug part of this. she wants to regulate how much pharmaceutical companies have to put into research and development, for example. cap how much the cost would be for prescription drugs, when you have a chronic condition. sees that as way to win votes and right thing to do it. by biotech sector took a huge hit on wall street because profits might not be so high if hillary clinton is elected and might be regulated more. i spoke to them had this morning and they're fine with that. running against democratic socialist bernie sanders, trying to capture the elizabeth warren wing of party, challenging wall street to have wall street react in negative fashion might help hillary clinton. that is final sort of big picture point, as she lays out
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more pieces of not repealing, changing obama care enhancing it in some way. she might come out against the cadillac tax supposed to be aimed at corporations but unions are knot happy about it. some in her camp say she may come out against the cadillac tax. that might be something very popular with labor unions. there is a lot of politics going on here obviously, trish. trish: for sure. for sure. always nice to buy a few votes along the way. ed henry. thank you very much. >> reporter: good to see you. trish: hate to bak you to you, folks, if you restrict market prices officially, you will wind up with warped results and less innovation. i want to bring owe vick to the conversation. she sets price of drugs. how will that affect the pipeline for example, of new drugs coming to market. >> i have a piece in forbes today that breaks down her plan. basically the key thing about this, there are two points i would make.
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first her plan has no shot of passing congress, whether republican congress or democratic congress. second point it makes problem worse. if you do something like restrict ability of insurers to have co-pays for drug prices only incentivize drug companies to charge even more for the drugs. you're not solving problem. reason why drugs are so expensive, there are two problems. one fda way overregulates the costs of developing new drugs, cost on average $2.8 billion to develop a new drug. her plan has nothing to reform the fda. the second point? is that drug companies have a near monopoly in which the government basically says, everybody has to have insurance. everybody's insurance has to cover certain things. so drug companies take advantage of that you have to actually introduce the market into the system so that drug companies have to appeal to consumers with cost effective medicines. trish: rich, sounds like more big government to me. >> yeah. i have to take issue, trish, with your comment about her not
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liking capitalism. i think anybody who watches this network remembers that the single, most, robust capitalist market ever was under bill clinton, in terms of job creation and gdp growth. so, i don't think hillary clinton was a mere bystander during the '90s. trish: he had some republicans he had to get along with over on capitol hill. >> i will say the markets response says to me one thing. markets think that hillary clinton will be president because if it was anybody making a comment like this, bernie sanders already has, nobody reacted when he or, suspect any republican says anything about health care. trish: i see. i see. you take this as bullish sign for your candidate. market is reacting to this negatively meaning therefore they must think she will be president. >> i will say, one other thing. remember, when hillary clinton ran health care in the '90s, it was not greatest success did set the table for affordable care act. who was big among the biggest
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supporters of affordable care act? pharma. pharmaceutical industry were big supporters of president obama and obamacare. trish: right. because they love the idea of government paying their bills. they never have to worry. they tell the government this is the price. the government can't think its way out of paper bag says sure. >> they like the idea of having tens of millions of people who are sick and uninsured be covered by insurance. that is not just humane. that happens to be economics as well. that drove them more than anything else. trish: avik, quick thought before we go here, burst of reality in the conversation as well. >> one thing that is important to realize that hillary clinton was not a bystander in the 1990s. she actually proposed basically blowing up the pharmaceutical industry. this trading today in the nasdaq is nothing compared to what happened in the pharmaceutical sector in 1992, when she basically advocated wiping out profits of pharmaceutical industry. we know what hillary clinton really wants to do.
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that would actually destroy innovative medicines. if you really want health care better for people you have to have cures for disease. trish: socialism we've seen it in europe and seen it in france. always good to have you here. richard, thank you. scott walker, everyone, he officially exited the 2016 race. so who is next? the promise of the cloud is that every organization
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trish: it is the toughest prison sentence of its kind. foer peanut executive stuart parnell, sentenced to 28 years in prin for deadly salmonell outbreak killing nine people, injuring over 700 people. our own liz macdonald has new details on the story. liz, these were pretty popular brands people consumed that were affected by this. >> trish, good to be with you. news breaking just a few hours ago, stuart parnell on the way
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to prison finally broke his silence. he said i'm truly sorry for the salmonella outbreak that killed nine individuals and sickened more than 700 as you pointed out. this is the first time he has broken his silence. he didn't testify in the criminal trial. he wouldn't testify before congress about the outbreak. you're right, pretty popular food products involved. i think that is really basically unsettling a lot of people. things like keebler soft batch peanut cookies, fame mouse amos cookies and, pet food was affected by salmonella outbreak. he is on his way to prison. we'll track the story. that is effective life sentence for him. he is 61 years old. other individuals sentenced to prison as well. trish: can i jump in to talk about the fact that he knew this was happening. >> yeah. trish: that is the most disturbing thing of all. he knew and he didn't care. >> one email uncovered said we
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have to be about money and dollar signs. indicated that we are aware afzal mow nell la issue but send out products anyway. so, investigators have found, i hate to say it, roaches, things like rodents, leaky roofs at the factory in southwest georgia. so they're paying a heavy price. you're right. it is historic verdict here. 28-year sentence for 61 stewart parnell. thank you very much, liz. trish: i have three little ones myself. you give them peanut butter sandwiches and cooks. cookies. ben carson is standing by his comments not supporting a muslim president. will this help or hurt the candidate long term? we're debating it. more teleagainst report after this.
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trish: okay, we have a market off 252 points. plenty of downside as investor contemplate what the fed can do
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if anything in the near future to tackle economic problems here at home and economic problems facing the world right now. market is off 255, off the lows of the session. nasdaq also trading lower. hillary clinton willing coming out moments from now announcing her plan to deal with prescription drugs. basically an enhanced obamacare system. tell you what? bio stocks don't like that. nasdaq is trading off as well. let's get to breaking news we have on volkswagen. fox news learned this is not the first time a major automaker has been accused gaming epa emissions tests. according to the epa, and department of justice, honda and ford alleged that they sold cars with a device that cheats emission control systems. honda paid $267 million. for that jeff flock has more details on this developing and breaking story. jeff? >> reporter: we had been tipped
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off to this earlier, trish, by some people who said this is not the first time. we've now found out when this happened in the past. and we have two instances here, as you report. ford and honda in 1998, combined to a total of $275 million paid out. in 1995, gm was also accused of putting defeat device in 500,000 cadillacs. they paid $45 million. and also in 1998, a number of big manufacturers big trucks like mack trucks, caterpillar, navistar, settled with the federal government for similar defeat devise. we asked, how could volkswagen do something like this? well, it happened before. we want to bring awe statement from martin winter corn, ceo of vw. there is widespread speculation that the board was meeting today and he would be fired. it didn't happen. here is what he said instead. take a listen.
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>> i also do not yet have the answers to all of the questions. but we're working hard to find out exactly what happened. to do that we're putting everything on the table as quickly, rigorously and as transparently as possible. >> reporter: so no resignation for martin winterkorn. there is another board meeting on friday. coincidentally, trish, his employment contract is up on friday. we'll see where all that lands but new information that kind of puts this in a little bit of a different light. trish: it does indeed. jeff, thank you very much. we have more breaking news. this time involving none other than donald trump. we'll take a quick break. how is that for a tease. we're back with more on trump right after this. can a business have a mind?
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trish: all right. we've got some breaking news coming to us donald trump who is hitting back at critics saying he has no real plans. saying he will release his tax plan in the next week. he also has a new target here, club for growth, the conservative club for growth, fiscally conservative. he sent them a letter, cease and desist letter on their attack ads, calling their ads false and defamatory. i want to bring back richard goodstein and republican strategist mercedes that lap. -- schlapp. we have the ads or excerpt. effective the club for growth is saying that donald trump is
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playing us all for chums he because he is not really a conservative. when it comes to economic principles he is not going to, he is not going to play by those conservative rules. trump wants us to think he is mr. tell it like it is but he has a record and very liberal and he is playing us for chumps. mercedes he is saying cease and desist. this is whole different kind of politics. >> called the club for growth, phony. they came to him, basically asking for one million dollars and he wouldn't give the money. this is sort of the insider battles that are happening between donald trump, the gop candidate, and club for breath, obviously a -- growth, a non-profit organization. again it's a valid argument for club for growth to make but they are hitting him hard on his tax plan. we'll see what he delivers next week. trish: let's face it, we don't even have the tax plan, rich. why should we assume it will be
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more liberal than conservative? or why should club for growth i should say? >> i read the letter that trumps lawyers said to club for growth. you had only one source alleging i would raise taxes. this network has tape of trump in 2000 or 1999, one-time tax on wealthy would clear the budget deficit. this is not just a single source. we also have trump on tape within the past day or two, saying he wants to stick it to hedge fund nice. so somehow the fact that he is balking at being called on the fact he will raise taxes is demonstrably untrue. trish: this kind of drives me much. he is talking basically about pe guys paying themselves via their invests. instead of saying okay, i will pay myself a salary and then have these invests on top of it, their salary, they're treating sort of like income. they're not paying themselves any income. paying themselves a few bucks
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and rest all in bonus and investment income. invests, let's face it, they are taxed differently, at 20% versus 40% that is the whole issue. i know warren buffett and the like like to get in on this but the truth is, warren buffett should pay himself as he really deserves, not just all through invests. i want to move on. mercedes, when we look at donald trump right now, we look at sort of left, right, middle all the policies and rhetoric seem to come from him that don't really adapt to say the traditional conservative mold are we in fact getting away from the two-party system? is he example of a candidate that will have cross appeal because he doesn't stick to the rules of one side or the other? >> cross appeal, he gets a part of independents looking for that fresh-minded, fresh approach individual that is running. it is interesting on hugh hewitt, on radio show, he talked about infrastructure.
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he talked about how expensive it is for government to pay for infrastructure and build buildings, build bridges for example. and how he would come in, donald trump, and actually made sense on this, he would come in and make that cost lower. so it is interesting how he had a business take on how to solve government bureaucracy, government problems in association with infrastructure. i found that to be a fascinating take. trish: mercedes, hey, that wall, stimulus money, right? i'm telling you. >> that is a bigger question is, with his big ideas, if they are realistic, how can we pay for, how can we pay for the wall, let's say? those are questions that we need ton asking. trish: yes. there is a lot of questions. i'm dying to see this tax plan. i can tell you, i kind of like, i was joking the other day. people thought i was kidding. i like reading tax plans. >> one thing, trish. trish: go ahead, rich. >> i love it when legitimate republican spokespeople like mercedes and others who weeks
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ago shuddered at notion trump might be taken seriously now actually kind of feels compelled to say good things because he might be the nominee. i think there is zero chance of that, but the fact that people who know republican politics are actually kind of daneing to say good things about him -- i'm just saying -- >> with hillary clinton. there are strengths and weakestness with each candidate. trish: with mercedes defense she has been fair. >> that is the whole point. she has been fair. trump doesn't deserve fairness i associate my well paul krugman he ignorant blow hard. two months from now we'll speaking differently about him. mark my words. trish: what happened, mercedes? he would be one of the guys. definitely a top contender. now suddenly nowhere. >> let me tell you, that was the shock of the day yesterday. i have to tell you, scott walker was the original outsider, everybody talks about the these outsiders now. that is where trump and carson
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and fiorina have taken up that space. governor walker really had nowhere to go. he was up 13% in march and dropped to 2% after the second debate. when you start seeing money dry up, it is interesting, his super-pac still had several million dollars there. it shows you a super-pac is not enough. he did the right thing by exiting the race. i think several of these gop candidates should follow his lead. trish: who is your money on next you two? mercedes first. >> be interesting to see if senator rand paul. he needs to make a decision on his senate race that will be interesting to watch. trish: rich. >> my money to win it all? trish: who will drop out. >> i think probably santorum. i think governor pataki because he doesn't want to ruin his reputation by going around and being seen as like the 12th person in 11-person field. trish: i know your money is on trump to win it, right?
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>> cruz. trish: you think that hillary clinton could beat trump. wow, that would be one heck of a prime time debate. >> ratings would be pretty good. trish: thank you so much. we're watching a selloff, down 226 digits right now as the selloff continues here on wall street. we're going to have more on this, what's behind it. hillary clinton in part behind it at least what we're seeing in biotech on nasdaq. all that after this. ♪ ng term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. why pause to take a pill
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trish: let's check shares of goldman sachs which are trading down 2%, everyone. as we watch selloff in the overall market. the ceo of goldman sachs, lloyd blankfein, announcing today that he has a -- curable form of lymphoma and will get chemotherapy treatments. the stock is down $4 and change at 179.25. on to another bank, bank of america. ceo brian moynihan will keep his ceo and chairman positions following a vote today by shareholders. wasn't a huge victory. he had a third of shareholders vote against the dual role. amazon cutting price of amazon prime membership, $67. to celebrate the original series, "transparent" happening this weekend. we'll have more on markets and political arena and the pope right after this.
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trish: here we are, everyone, 21 minutes before the close of trading, no, the final hour. we still have a little bit of ways to go. joining me chad morganlander and liz claman. market has a lot of concerns about the fed and whether or not the fed has any bullets in its arsenal.
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i would argue no think point. just 20 minutes from now hillary clinton will talk what she wants to do regarding big pharma. chad, she wants to come out to basically set prices. this will have big effect on entire sector. biotech stocks getting slammed. nasdaq await the news here. what would be effect of overall for the industry if this would happen? >> health care, if we take a step back, is 16% of the u.s. economist. any talk of changing reimbursement or infrastructure would have dell tear russ effect on pharmaceuticals. trish: as well as the pipeline. >> as well as the pipeline. they're putting up tremendous amount of money in r&d to get the payoff down the road. that payoff is not virtually guaranteed. hence the risk coming back no in
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the market putting pressure on biotechs in general. trish: hillary clinton speaking in iowa. we'll watch for details and as well as biotech investors right now. i want to go back over to liz watching this market here. overall, again a lot of concerns about the fed. she will be speaking, janet yellen is, liz, on thursday. >> right. trish: so i made this point before. seems like the market is so dependent on every single word these guys say. too much so? >> interesting but i think too much so but the market is gigantic voting machine. it's a huge herd and putting a lot of focus exactly what happens next with a teeny, tiny rate hike which a lot of big ceos have been on our program saying doesn't make that much of a difference when it comes to my decision to hire, my decision to spend money. look its something that matters. all you have to look at volatility index, so-called fear index, spiking 15%. why was much less yesterday? why are we up triple digits on
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the dow yesterday and nowdown triple digits? this is volatility people were saying watch out for it. here it is coming. we had smooth sailing for a while. deal with it. this is a voting machine we can't control. trish: as you're saying, we're watching vix doing a little bit of trading to the upside, liz, chad, i remember not too long ago it was 12. now 23. it basically measures volatility, it measures fear. you see it creeping up in the marketplace, is there a level you say on the vix, you say, whoa, watch out? >> not menially speaking. i think vix is elevated for next three to six months. federal reserve is looking at that carefully. they really do not want the vix to be high, one. reasons of many they decided to perhaps go into 2016 for rate hike. trish: are you surprised they doesn't bother with rate hike? >> no we were not surprised. look, 2016, there are various external in thes are happening
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in the -- externalities happening within the markets. overseas global concerns within chinese markets. they don't want to raise -- trish: worried about employment here and inflation. >> they say that. inflation and employment are their dual mandates but in order to achieve the dual mandate they also do not want volatility within the financial markets, in particular the credit markets. >> then you have to ask yourself, trish, you can't control every market in every country. i don't know what the fed is thinking that it can control or or basing every move on some point on the globe that may be too hot to touch, we'll never see a rate hike. >> i think the general overriding concern is that the chinese markets, the chinese economy, which has been really the engine of growth over the last seven years -- >> second largest in the world. >> decelerating, right the second largest, but also customers selling into china which are, other emerging nations are really decelerating as well. so they don't want to be the one
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to perhaps tip the boat into a contagion. or, they're generally concerned again about that volatility. so they will wait a couple of months. i mean, look a couple month, every day is monday again to us, right? so they will wait a couple months. then they will test the waters there. but u.s. economy, let's make no mistake about it, it is still growing quite nicely at 2 to 3%. the jobs market is getting better. unemployment rate -- trish: you're convincing me they should have done, it chad! thank you very much, liz. we'll see you at top of the hour for the final hour of trading. and everyone we're awaiting the pope to land in d.c. take a look at live shot coming to us of andrews air force base. we'll have more on the pope and security involved here. some interesting stuff regarding drone usage. and the pope. that's next. ♪
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trish: pope francis will be landing in the united states of america at any moment. right now you're looking at a live picture coming to us from andrews air force base in washington, d.c. where he is expected to land, as you can imagine, major cities including d.c. and manhattan, all on high alert this week. they're going to be lots of people, lots of traffic, lots of security. he has a jam-packed schedule. officials don't take chances on security threats including drones. take a listen to this. >> federal aviation administration wants you to know the cities of washington, d.c., new york, and philadelphia are no-drone zones during the papal visit from september 22nd through the 27th. flying a drone in the area pope francis visits is against the law.
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violators could face stiff fines and criminal penalties. enjoy the papal visit and leave your drone at home. trish: really, has it come to that? that is the psa message from the faa. but you know there is actually some good reason, believe it or not for these rules. our own liz macdonald has very latest on a drone slamming into a new jersey home. and we're joined by jan morgan, an expert in the second amendment who has thoughts on some of these drones and exactly what you can do if you see one. liz, tell us first of all, what happened here in new jersey? how it relates to the papal visit? >> what happened, woman by the name of jane white, standing outside on the street talking to her friend in linden, new jersey. see as drone flying overhead. that is pretty low. comes home, the daughter says the drone crashed into the roof of the house. apparently operator of the drone self-reported and called into the police. that person was owner of the drone. we don't know the individual's name. that is according to reports.
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here is the thing. there ththat's been 764 close encounters with drones. faa doesn't want any close encounters between drones and pope. here is why. faa rules say hobby its can fly drones below 5400 feet. commercial drones can fly lower than 400 feet. they are idea to use drones but faa says watch out criminal penalties. we don't want any drones near the pope. $25,000 potentially in fines if they're caught. trish: jan, i don't want any drones near me. forget the pope. >> i don't want any near me either. trish: what are things coming to when you have to be worried about a drone hovering outside of your own home? >> you know, trish, i'm actually feeling the pain of drone owners today. i don't own a drone. i have a lot of friends who own them and enjoy them for recreational purposes in their own yards and own privacy. they don't break the law.
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they're not doing anything dangerous with them. as everything there are people who abuse the privilege. here you have it, as elizabeth mentioned, there are a lot of people abusing the privilege. as a result i think you will see a lot more involvement from the faa regarding restrictions. same thing with gun owners. i hate going places to see guns prohibited signs. drone owners will see the signs pop up everywhere. you sate from the faa it will be out there. trish: because these drones are going everywhere and they're real concern. we spoke about this earlier, jan, there was a man in kentucky, liz, like to fit your reaction to this. man in kentucky outside minding his own business. he had some children there with him all of sudden there are some drones flying overhead. what did he do? he got out his gun and shot the thing down of the listen to him. he spoke with us moments after it happened. here it is. >> my girls were on the back porch and came in said, dad there is a drone flying around out here.
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i went out and looked sure enough the drone was flying around. we knew there was camera. we could see it. not, what are these guys doing? are they peeping toms? or is it voyeurism? are they looking to take kids from somewhere? looking for something to steal? did it have a weapon mounted to it. i was arrested for criminal endangerment and wanton recklessness. trish: the guy was arrested for criminal endangerment. is that fair? >> it is not a matter of whether or not it is fair. the laws are not always fair. faa wants you to know you will not be shooting down anything in the skies number one. i can tell you in the deep south there is a lot of that going on, trish. but people in the south don't have enough sense to tell police they shot one down. trish: good for them. >> good point. you can be sympathetic to the homeowner. you don't want a drone camera flying near your child. that is the thing i think with the pope. they don't want drones equipped
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with cameras coming in to take aerial shots of the pope. trish: this is just common sense. go ahead. >> not just about the shots. you know department of homeland security did issue an intelligence assessment to all law enforcement agencies in the country not too long ago expressing concern about the next terrorist attack being used in a situation with a drone. they're aware. we have seen an 18-year-old kid developed a drone where he could have semiautomatic weapon firing. we've seen that on youtube. so yeah, there is a lot of potential for abuse there. of course people are always going to abuse that privilege so. trish: brave new world. liz, jan, thank you so much. jan, good to have you back on the show. connect with us on social media. i want to hear from you. you can tweet me trish underscore reagan or@trish intel. find us on facebook or talk to us on facebook. i'm there. whole team is there. we like hearing from you. trishintel on facebook. r
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liz: we're off the lows, that's the good news, but compared to yesterday the markets are in free fall. the dow jones industrial average down more than 200 points, 219 right this second, about 1.5% to the downside here. we're also looking at a very weak s&p, one day after climbing out of correction territory, the dow jones is back in it. and here's the s&p, down 29 points. the nasdaq losing 86. at one point i looked up, and the nasdaq was down 99 points. so everything's getting hit hard. by the way, all three indices now in the red for the year. the market volatility coming on a major news day. first up, pope francis headed

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